Bank lending and environmental quality in Gulf Cooperation Council countries

Shabir Ahmad Hakim () and Shaista. Alvi
Additional contact information
Shabir Ahmad Hakim: Future Education University College
Shaista. Alvi: Amity University Dubai

Palgrave Communications, 2025, vol. 12, issue 1, 1-13

Abstract: Abstract To achieve economies with net-zero carbon emissions, it is essential to develop a robust green financial intermediary channel. This study seeks empirical evidence on how domestic bank lending to sovereign and private sectors in Gulf Cooperation Council (GCC) countries impacts carbon dioxide and greenhouse gas emissions. We employ PMG-ARDL model to panel data comprising six countries in GCC over twenty years for carbon dioxide emissions and nineteen years for greenhouse gas emissions. Our findings reveal a long-term positive impact of both bank lending variables on carbon dioxide and greenhouse gas emissions. In addition, lending to the government shows a negative short-term effect on greenhouse gas emissions. The cross-country results demonstrate the presence of a long-run effect of explanatory variables on both types of emissions, except for greenhouse gas in Saudi Arabia. The sort-term impact of the explanatory variables on carbon dioxide and greenhouse gas emissions is quite diverse. Not only do these effects differ across countries, but some variables have opposing effects on the two types of emissions within a single country. The findings of this study present a new perspective for GCC economies: neglecting total greenhouse gas emissions and concentrating solely on carbon dioxide emissions means missing critical information for devising effective strategies to combat threats of environmental degradation and achieve net-zero goals.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1057/s41599-025-04581-w Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-04581-w

Ordering information: This journal article can be ordered from
https://www.nature.com/palcomms/about

DOI: 10.1057/s41599-025-04581-w

Access Statistics for this article

More articles in Palgrave Communications from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().